Eakes: Push Trusteeship, Sustainability

Tuesday, 07/14/2009 15:20 | by Anne Claire Broughton

Self-Help Credit Union Founder Martin Eakes received a standing ovation from a packed ballroom of SJF Summit attendees this morning after giving a commanding and inspirational keynote about the need to embrace to trusteeship and sustainability.

Eakes, a national leader in CDFIs and in the fight against predatory lending, said it’s important to be a trustee for the poor and disadvantaged. He told a story of how a borrower visited him and explained how he had been hoodwinked into making a bad refinancing deal on his mortgage. He said this case pushed him into starting the Center for Responsible Lending, which is affiliated with Self-Help.

He said it will take some time to get over the mortgage meltdown. “It’s going to be four or five years before we have a recovery,” he said as he showed a graph to illustrate the housing crisis.

Eakes noted that many subprime loans were designed so they would fail. He said more than 50 percent of black residential mortgage holders have subprime loans, a problem he called a “walking neutron bomb.” And he said the effects of this crisis will hurt nearby homes.

“It becomes an infection for the four or five houses around it,” he said. “You end up with this epidemic that becomes a downward spiral.”

He said Self-Help has been trying to get vacant, foreclosed homes back on the market. Just last week, he said Self-Help sold homes in hard-hit areas for $1,500 a piece.

But Eakes said there is hope that Americans can turn things around.

“I believe that suffering and self sacrifice can heal the corrosion that’s taking hold of this country,” he said.

As he closed, Eakes neatly wrapped up his message against predatory lenders with this call: “While it is true that we love our enemies, sometimes we have to stop them first.”